City Lodge out with a trading statement on Friday. The share price hardly budged. But I guess that the stock does not attract that much attention, it is quite tightly held, Hans Enderle owns ten and a half percent of the company through an entity, whilst the next three biggest shareholders own another 15 percent of the company and are not going away any time soon. In fact only around a quarter of the company's shares trade a year. Sounds like too much to me.
The official release from the SENS feed is as follows: "...diluted/undiluted headline and basic earnings per share for the year ended 30 June 2010, which include the costs and effects of the BEE deal concluded in the prior year, are anticipated to be between 25% and 30% higher than the previous year. The prior year included certain one-off costs in relation to the BEE transaction.
Normalised headline earnings per share, which excludes the costs and effects of the BEE deal, are however anticipated to be between 0% and 5% lower than the previous financial year." BEE costs around 104 million Rands.
So basically a tough year for the group, right? Perhaps, but remember that there is a shift here, higher debt and as such financing costs to refurbish existing and build new hotels. More rooms equals higher revenue but perhaps lower occupancies as a direct results of an economic slowdown in South Africa. Results soon, in the next few weeks.